Data released from the S&P CoreLogic Case-Shiller Indices for July 2021 show that home prices continue to increase across the U.S. More specifically, the U.S. National Home Price NSA Index reported a 19.7% annual gain in July, up from 18.7% in the previous month.
The 10-City Composite annual increase came in at 19.1%, up from 18.5% in the previous month. The 20-City Composite posted a 19.9% year-over-year gain, up from 19.1% in the previous month.
The highest recorded year-over-year gains in the 20 cities listed were Phoenix, San Diego, and Seattle. Phoenix led the way with a 32.4% year-over-year gain, followed by San Diego with a 27.8% increase, and Seattle with a 25.5% increase.
"July 2021 is the fourth consecutive month in which the growth rate of housing prices set a record," says Craig J. Lazzara, managing director and global head of Index Investment Strategy at S&P DJI. "The National Composite Index marked its fourteenth consecutive month of accelerating prices with a 19.7% gain from year-ago levels, up from 18.7% in June and 16.9% in May. This acceleration is also reflected in the 10- and 20-City Composites (up 19.1% and 19.9%, respectively).”
“The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,” Lazzara continued. “In July, all 20 cities rose, and 17 gained more in the 12 months ended in July than they had gained in the 12 months ended in June. Home prices in 19 of our 20 cities now stand at all-time highs, with the sole outlier (Chicago) only 0.3% below its 2006 peak. The National Composite, as well as the 10- and 20-City indices, are likewise at their all-time highs.”
The U.S. National Index posted a 1.6% month-over-month increase in July, before seasonal adjustments, while the 10-city and 20-city composites both posted an increase of 1.3% and 1.5%, respectively.
After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.5%, and the 10-City and 20-City Composites both posted increases of 1.4% and 1.5%, respectively. In July, all 20 cities reported increases before and after seasonal adjustments.
"July's 19.7% price gain for the National Composite is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. This month, New York joined Boston, Charlotte, Cleveland, Dallas, Denver, and Seattle in recording their all-time highest 12-month gains. Price gains in all 20 cities were in the top quintile of historical performance; in 15 cities, price gains were in the top five percent of historical performance.
"We have previously suggested that the strength in the U.S. housing market is being driven in part by a reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. July's data are consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question.
"Phoenix's 32.4% increase led all cities for the 26th consecutive month, with San Diego (+27.8%) and Seattle (+25.5%) not far behind. As has been the case for the last several months, prices were strongest in the Southwest (+24.2%) and West (+23.7%), but every region logged double-digit gains and recorded all-time high rate increases."
